The definitive guide to incorporating a company in Andorra

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🏛️ Why incorporating a company is often the right (and necessary) choice

Incorporating a company in Andorra is far more than simply “opening a business”: for many people, it becomes a central element of their personal, professional and tax strategy.

For certain types of residence—such as residencia por cuenta propia (self-employment residence)—it is a mandatory requirement. But it is also a very common choice for individuals with other residence categories, and even for non-residents. At the same time, it is the most recommended legal structure for running professional, business or asset-holding projects from the Principality.

Although Andorra offers the figure of the particular professional (similar to a self-employed individual), in practice, once you reach a certain level of clients, turnover or risk, incorporating a company becomes the recommended option for legal certainty, limited liability, credibility with banks and clients and future flexibility to grow or bring in investors

This guide gives you the complete overview you need before incorporating—to avoid losing time or money and to prevent mistakes that later become costly to fix. Technical aspects are further developed in the internal articles linked throughout the text.

🔔 Essential preliminary considerations before you start

Before beginning any formal procedure, strategic reflection is indispensable.

Most corporate problems in Andorra arise because:

• the wrong company type was chosen
• the articles of association were too generic or drafted incorrectly
• the activity was poorly defined, and the commercial licence later doesn’t fit
• governance and the role of each shareholder were not planned
• banking operations were not anticipated, even though they condition EVERYTHING
• a structure was created that needs to be modified just months later

➤ To deepen this initial phase, you can consult Key aspects before incorporating a company.

📘 Drafting the articles correctly: the foundation of legal certainty

The articles of association are the DNA of the company.

Andorran company law requires a minimal content, but the real difference lies not in complying with the minimum, but in designing an internal structure aligned with the actual project.

Well-drafted articles allow you to:

• anticipate conflicts between shareholders
• define the powers and limits of directors
• clearly establish political and economic rights
• regulate share transfers and the entry of new investors
• adapt governance to the real project and its future evolution

➤ You can find a complete guide in Company bylaws in Andorra: mandatory content and best practices.

🤝 Shareholders’ agreement: essential when there is more than one shareholder

When there are several shareholders, articles of association are almost never enough.

There are internal rules, commitments and decisions that cannot appear in public documents filed at the registry. Yet they are crucial to protecting both the project and the relationship between shareholders.

This is why a shareholders’ agreement is essential. It is the private contract that regulates:

• expectations of each shareholder
• specific powers and limits
• entry and exit of shareholders
• non-compete and commitment obligations
• real internal governance (who decides what, how and when)
• mechanisms to resolve conflicts before they escalate

Without a shareholders’ agreement, the company is exposed to deadlocks, conflicts and avoidable disputes.

➤ You can read the article Shareholders’ agreement: what it is for and when it is essential.

🏗️ Choosing the company type: SA or SL?

In Andorra, there are only two forms of capital company:

• Societat Anònima (SA) – minimum capital €60,000
• Societat Limitada (SL) – minimum capital €3,000

Most operating businesses choose the SL because it is simpler and sufficient for many projects. However, the SA becomes especially advisable when:

• several investors are expected or fundraising will be recurrent
• the project has significant economic impact or clear international projection
• a robust structure is needed for complex or multi-jurisdictional operations
• future capital increases or corporate reorganisations are expected

➤ For all differences, see SA or SL in Andorra: real differences and how to choose the right structure.

💶 Share capital: the minimum and what is actually advisable

The law sets a minimum capital depending on the company type, but that doesn’t mean it’s the right amount for your project.

You should consider a higher capital contribution when:

• the company will require strong solvency for banking
• the business involves international clients or high-volume operations
• you want to finance future projects without resorting immediately to loans
• you seek investors and want to show stability from day one
• the company will act as an asset-holding or patrimonial vehicle

Insufficient capital can limit financing, shift personal risk to shareholders or force early restructuring.

➤ More details in Share capital in Andorra: minimums, contributions and how to structure it safely.

🧑‍💼 Directors: who can be one and how to structure governance

Andorran company law places directors at the centre of corporate governance. It is not a simple formality: the director is legally responsible before the company, shareholders, creditors and the Administration.

Key points:

• directors may be resident or non-resident
• they may be individuals or legal entities (with an individual representative)
• they assume joint and several liability with the other directors
• they must respect strict duties of diligence, loyalty and information
• they are liable for negligence, omission or violation of the law

Possible governance structures

You must choose the governance model:

• sole director
• joint directors
• joint-and-several directors
• board of directors

If you choose a board, you must define:

• the role of the chair
• the functions of the secretary
• board members
• delegation of powers
• voting system and possible casting vote

➤ More details in Company directors in Andorra: responsibility, requirements and who may be appointed.

➤ And also in The board of directors in Andorran companies: composition, functions and responsibility.

🏷️ Defining the activity correctly: essential for the commercial licence

In Andorra, it is not enough to include a generic activity in the articles.
Nor is it advisable to list everything that the law allows.

To operate, you also need a commercial licence (autorització comercial / llicència comercial). Both the Government and the municipalities (comuns) require:

• a clear description of the activity
• coherence between the activity and the articles of association
• a physical premises if the activity is classified
• compliance with sanitary, capacity, fire safety or sector-specific rules

➤ To learn more about the comuns, see The parishes of Andorra: structure, functions and territorial characteristics.

A poorly defined corporate purpose may lead to:

• refusal or suspension of the authorisation
• the need to amend articles
• months of delay before being able to invoice

➤ More details in Opening a business and obtaining a commercial licence in Andorra: requirements and essential regulations.

🏦 Banking operations: the factor that conditions the project the most

Andorra is part of the SEPA zone, but its banking system applies strict AML/KYC standards.

In practice, banks:

• analyse the business model and shareholder profiles in depth
• may reject certain digital or high-volume international models
• may impose operational limits or specific conditions
• often require extensive corporate and personal documentation
• request detailed explanations, especially for non-standard projects

Therefore, it is essential to:

• plan your banking strategy before incorporating
• know whether banks accept your business model
• prepare corporate documentation and proof of funds from the outset
• foresee alternatives if the project is international or involves digital assets
• know what information must be provided—and how

Sometimes it may be necessary to combine:

• Andorran banking for the main operation
• foreign accounts for certain payment gateways
• complementary corporate structures to separate risks or activities

➤ Useful articles: The Andorran banking system: banks, financial regulation and international presence and SEPA in Andorra: what it is and how it works.

Andorra also participates in CRS and FATCA information-exchange frameworks.

➤ You can learn more in CRS: the global standard for tax transparency and its impact in Andorra and FATCA: the U.S. model that transformed international tax transparency.

🧩 Purpose of the company: operating, holding or asset-holding?

A company may serve many functions. It is essential to define its purpose before incorporation:

• Operating / business
• Holding
• Asset-holding
• Succession planning
• Digital or international projects

You may also combine several of these.

Each choice affects:

• taxation (including possible special regimes)
• required capital
• governance structure
• banking profile and risk criteria
• liability allocation
• accounting and compliance obligations

➤ For holding companies, see Holding companies in Andorra: taxation and main advantages.
➤ For corporate taxation: Corporate income tax in Andorra: rates, special regimes and deductions.

🧱 Once the design is clear: the formal incorporation process

The formal process generally includes:

• Foreign investment authorisation (if any shareholder is non-resident) ➤ Foreign investment authorisation in Andorra
• Company name certificate
• Drafting of articles and corporate documentation
• Opening of a bank account and capital deposit
• Notarial deed of incorporation
• Registration in the Registry of Companies
• Obtaining the NRT and fiscal activation
• Commercial licence
• Additional sector-specific permits if required

➤ Complete step-by-step guide: Incorporating a company in Andorra: steps, requirements and advantages.

🎯 A well-designed company is a structure that lasts for years

Incorporating a company in Andorra is perfectly feasible if the project is well conceived. But it can cause significant problems if done:

• in a rush
• with generic or incomplete articles
• without planning governance
• without banking foresight
• without understanding fiscal implications

Plan carefully:

• the real purpose of the company
• governance and shareholder roles
• adequate capital
• activity and required licence
• banking strategy
• articles and shareholders’ agreement

If you are a non-resident shareholder, it is especially important to read Place of effective management: key to determining a company’s tax residence.

🤝 How ELYSIUM can support you in this process

Incorporating a company is both a technical process and a strategic decision. There are no templates that work for everyone: what is sufficient for one client may be inadequate—or unnecessarily complex—for another.

The ELYSIUM method is based on three very simple ideas:

• understanding honestly where you are today and where you want to go
• designing a structure that covers your real, current and future needs
• investing exactly what is necessary: no less (to avoid unnecessary risk), and no more (to avoid paying for complexity you don’t need)

This translates into:

• avoiding “catalogue solutions” or templates that ignore your personal and professional reality
• adapting the scope of the engagement and the budget to the true complexity of your case
• supporting you not only in the incorporation itself, but also in the early stages: banking, residence, taxation and compliance

Additionally, we always take taxation into account. Our aim is to help you pay the minimum amount of tax legally possible, always within strict compliance.

If you want to reduce complexity, avoid mistakes and make decisions with clarity, it is far more efficient to invest in a solid initial design than to correct a poorly planned structure later.

If you would like a personalised analysis of your case, you can contact us through the contact form.

And if you prefer to discuss it directly in a confidential and tailored meeting, you can book your appointment using the link in the footer of our website.

Our goal: helping you achieve yours.

Last updated: November 2025